David Montgomery's European newspaper group, Mecom, reported a fall in first-half operating profit yesterday as advertising revenues fell in Denmark, Germany and the Netherlands.

Mecom shares slipped 3.5p to 18.5p after it said operating profits were down 3% on a like-for-like basis to £64m in the six months to the end of June, with revenues flat at £770m. Advertising revenues across the group fell 2% to £401m, offset by a 3% gain in circulation revenues to £261m.

In Denmark, advertising slid 13% as the company battled weak economic conditions and a freesheet war. Montgomery, the executive chairman, said the company had recouped at least half of the Danish advertising slump through cost cutting.

The other problem country was Germany, where declining consumer confidence sent advertising revenues down 7% at papers such as the Berliner Zeitung and Hamburger Morgenpost.

The best performer from the company's five divisions, with 12% growth in advertising revenues, was the Norwegian business, Edda Media, which has attracted bid interest in recent months. Poland also held up with a 1% gain in advertising, while the Netherlands, Mecom's biggest market, saw a 1% fall in advertising but a 1% uplift in total revenues.

Mecom is less exposed to classified advertising than its UK peers and benefits from a high volume of subscription readership - some 97% of its daily newspaper sales in the Netherlands, for instance.

The company was contacted by potential buyers after they learned it had briefly considered floating Edda, which reported revenues of £226m last year and could be worth about £375m.

"This [a flotation] might have been a good way to realise funds but for various practical reasons an IPO was not deemed appropriate," Montgomery said. "In the aftermath of that becoming public we did receive several approaches. That's because the Norwegian business is highly attractive.

"But our board has said on two separate occasions its strong preference is ownership of the Norwegian business." Asked if Mecom was currently considering an offer, he replied: "I can't comment further."

A sale of the Norwegian business would help to reduce Mecom's debt, which stood at £546m at the end of June, and could ease pressure on its share price, which has been struggling along with other newspaper stocks in recent months. The Norwegian business accounts for 13% of the country's regional newspaper market, with more than 40 titles such as Sunnmørsposten and Drammens Tidende, as well as more than 60 websites.

In the first half, Mecom's revenues in Norway were up 9% and advertising up 12% on a like-for-like basis. The group described the division as its "digital leader", with online accounting for 9% of revenues.

Across the group only 4% of revenues were from digital operations, although this was up from 3% the year before. Mecom wants 10% of newspaper advertising revenues to be digital by the end of next year, up from 5% at present.